FAQ

1. Who owns LTWP?

LTWP is owned by:

• Aldwych Turkana Limited (owned by Anergi, an African power company established through the joint venture between Africa Finance Corporation and Harith General Partners of South Africa);
• KP&P Africa B.V.
• The Danish Climate Fund through Investment Fund for Developing Countries (IFU);
• KLP Norfund Investments AS of Denmark;
• Vestas
• Finnfund - the Finnish Fund for Industrial Cooperation Ltd; and
• Sandpiper

LTWP is financed by a consortium of senior and subordinated lenders:

• European Investment Bank
• African Development Bank
• The Trade and Development Bank (TDB), formerly the PTA Bank
• East African Development Bank (EADB)
• PROPARCO
• Netherlands Development Finance Company (FMO)
• Deutsche Investitions- und Entwicklungsgesellschaft (DEG)
• Eksport Kredit Fonden of Denmark (EKF)
• Standard Bank of South Africa
• Nedbank of South Africa
• EU Africa Infrastructure Trust Fund (EU-AITF)

2. When will we see 310MW being supplied to the national grid?

  • LTWP has 365WTGs with a capacity of 850kW each for a total installed capacity of 310MW.
  • Depending on the wind speeds and the consistency of the wind, the WTG will, according to the power curve, produce from 0MW (no wind) to 850KW (>17/18m/s).
  • The entire plant comprising 365WTGs, 365 step-up transformers 0.69/33 kV per Unit, a 33kV collecting grid, a sectionalized 33kV substation, step up block transformers 33/220(400) /30kV including the Dynamic Reactive Power Compensation Systems and all miscellaneous equipment, infrastructure and control and a SCADA System are in place and FULLY installed.
  • As at 3rd October 2018, 93 WTGs are “hot” commissioned i.e. powered by the energised T-Line, and every day between 12 -24 WTGs will be added. By October 16th, all 365WTGs should be supplying power to the grid.
  • Update as at 13th October 2018: we have 182 WTGs hot commissioned and we generated 129MW throughout the night of 12th October. The hot commissioning will likely take a few days longer – we are estimating Oct 22nd – 26th. We will continue to keep the public posted.

3. When will Kenyans start seeing the benefits of this project?

  • LTWP will displace EUR 125M of fossil-fuel imports which means that from a macroeconomic point of view, Kenya will save on its current account by saving EUR 125M of imports;
  • Depending on how KPLC dispatches the power and what the energy mix in the system is, there will be a gradual – but over time- reduction in power bills. However, LTWP is simply an IPP (admittedly 17% of Kenya’s power) but does not control tariffs or power bills. We simply generate and sell power to KPLC.
  • With the successful completion of the T-Line, grid stability in the entire Kenyan Grid should improve. This ought to result in better quality of power (i.e. stable voltages, lower power trips etc) which positively impacts productivity of businesses.
  • The successful completion of this project will showcase Kenya as a safe and reliable investment destination – LTWP was the largest private sector investment in Kenya’s history with one of the most complex project finance structures undertaken in this region. Kenya is now ready for large-scale private sector infrastructure investment.

4. The rumour is that the World Bank pulled out of this project because they reported it would cost Kenyans more in the long run. Is this true?

• The World Bank’s participation in the LTWP Project was to provide the IDA PRG and MIGA Guarantees primarily to cover T-Line Delay risk. Following their exit, this instrument was offered by African Development Fund Partial Risk Guarantee Letter of Credit (ADF PRG LC).
• To date, the ADF PRG L/C remains uncalled and is proof of Kenya’s maturity as a safe and credible investment destination.
• There were 3 main concerns: (i) can wind power be safely integrated into an inherently weak grid; (ii) will the T-Line be built on time; and (iii) will there be sufficient demand for LTWP’s wind power. LTWP addressed together with KPLC the issues of the grid integration and many technical interventions and investments (Nairobi Ring and associated infrastructure, the LTWP STATCOMs in Loiyangalani and introduction of more geothermal (to provide spinning reserve) have since been implemented. The T-Line risk is not one that LTWP could control. As far as demand is concerned, Kenya has less than 25% overall electricity penetration and with peak demand hovering at 1800-1900MW, Kenya must grow its power supply with renewable, affordable and reliable power. It has taken LTWP 10 years to come online and strategic planning is not to wait for demand and then build power plants – that strategy already failed and resulted in expensive power being brought in to plug the deficit. The world over, development is spurred by power supply being available and demand growing around it. This is a subjective discussion and LTWP and the WB agreed to disagree. LTWP and the GOK agreed that reliable, green, affordable power was in the long-term interests of Kenyans.
• It is unfortunate that the TI was late, but mathematically, Kenyans are still far better off – even with the delay, the overall cost of power from LTWP (adding in the 1 year of TI Delay DGE Payments) is approx. EUR Cents 8.8 per kWh. That is approx. 10.5 US Cents per kWh – still cheaper than any other power and cheaper than the Feed in Tariff available today.
• LTWP maintains that whatever the criticism then, or now, LTWP will transform Kenya’s economy and that is no longer debatable, but fact. We all have lessons to learn – LTWP, GOK and indeed the WB and that debate will persist for a long time. But, that LTWP is a good project – that is indisputable.

5. What are the comparable costs of wind power?

LTWP is Kenya's cheapest power after hydro. For the first six year, LTWP will sell the energy at EURO Cents 8.529 per kWh and after that time, at EURO Cents 7.684 per kWh.

6. Why were the taxpayers penalised and will we be getting a refund?

LTWP has contractual arrangements for the failure by KETRACO to deliver the T-Line on time. LTWP achieved First Commercial Operations Date (119WTGs on 27th January 2017) and ramped-up and completed construction of all 365WTGs on 29 August 2017. Under the PPA, as long as LTWP had at least 50MW (59WTGs “mechanically available” i.e. had the TI Operation taken place, we would have been able to evacuate power) we were entitled to receive TI Delay Payments. Do remember that LTWP has loans with repayments of approx. EUR 75M per year that is approx. KES 8.5 Billion per year!!! LTWP has had to pay its loans and maintain and operate a wind-farm with over 450 employees whilst waiting for the TI to be in place. LTWP only collected EUR 46M (KES 5.7B) and did not even charge for the balance and deferred that over a 6-year period. No investor has ever done this to the benefit of the taxpayers before.

7. Experts say LTWP can only achieve about 50% of its installed capacity when generating at peak, is this true?

• False. The capacity factor of LTWP has averaged over 67% in recorded wind measurements over the last 5-6 years;
• On September 29th, LTWP had 81% capacity factor on 29 WTGs – possibly the windiest wind farm on the planet!
• LTWP has not contracted under the PPA to always provide 310MW – that is simply impossible given that you are dependent on wind. We aim to average 65-67% over the operating year and that is outstanding by any accord.

8. Why are you not supplying power to the local area first?

LTWP is an Independent Power Producer (IPP) and legally, can only sell power to the Offtaker (KPLC). The Rural Electrification Authority (REA) is legally responsible for delivering power in the area we operate in and will need to liaise with KPLC to purchase power from them to supply to the residents of the area. LTWP is not mandated and cannot supply power directly to the area; The technical constraints include the need for sub-stations, transformers and other equipment that REA will need to install. LTWP is committed to working with MOE, KPLC, REA, ERC and County Government of Marsabit to assist these parties in supplying power to the key areas in the vicinity of the plant – namely, and to start with, Loiyangalani, Gatab and South Horr. Technical studies by LTWP have been completed and will be shared and discussed with the authorities once the wind farm is commissioned.

9. Is there potential to expand the farm so more power is being generated? Why did you stop at 365 turbines?

We undertook studies to determine what level of wind power could be absorbed safely by the wind farm and at that time, a max capacity of 310MW (allowing for capacity factors of between 50-70%) was deemed prudent. As Kenya’s demand rises and there is sufficient spinning reserve to balance intermittency occasioned by wind power, and subject to GOK / KPLC requirements, LTWP may explore expansion although there is nothing in the plans at this stage. Our commitment is to first deliver cheap, renewable power that has been long awaited to the Kenyans!

10. How long will the wind farm generate power for Kenya? What happens at the end of this project? Will the turbines be removed from the land?

LTWP has a 20 Year PPA with KPLC. The technology will likely become obsolete after that (if not earlier) and LTWP may need to either replace or enter into negotiations with KPLC to extend the PPA.

11. How are you storing the power when there is surplus?

Wind Power cannot be stored so it must be used when generated. LTWP will provide KPLC forecasts and KPLC will have to plan the energy mix in the system and either dispatch or the wind-farm is curtailed (i.e. no power generated).

12. What happens when the wind drops?

LTWP provides forecasting to KPLC and when the wind drops, KPLC’s National Control Centre (NCC) must balance the load with “spinning reserve” which is power from sources that are instantly available. This is standard dispatch protocol and best practise uses hydro / geothermal as spinning reserve.

13. How are you helping the local community?

Since the project's inception, LTWP has been ensuring that the local community benefits from the project. As part of this commitment, we established the Winds of Change Foundation that has been working hard to improve the livelihoods of the communities in the project area. The foundation implements projects that enhances employability via primary & secondary education and vocational training support; improves access to health services by supporting health education and facilities; and
improves access to water by constructing boreholes and water supplies. For more information, please visit https://ltwp.co.ke/winds-of-change/

14. Is there possibility of exporting the energy you generate?

LTWP exports only into the national grid however, KPLC can (and ideally should) export the cheap wind power to Uganda at night so that Uganda can use Lake Victoria as a pump storage. As Kenya gets connected to the various power pools (via Namanga and Lessos), it will be able to export power and earn revenues rather than curtail power and pay for unused power under LTWP’s take-or-pay regime. LTWP offers KPLC and Kenya an incredible opportunity to become a regional power trader / supplier.

15. Do you have any plans to tap similar sources of energy in other parts of the country?

At the moment, LTWP is focused on ensuring that we meet all our obligations to deliver the power from our plant. Wind Power plants have a long gestation period and Kenya will have to undertake studies to determine what its demand / supply will be in the years ahead along with the planned plants in the LCPD Plan 2017. LTWP started planning in 2008 and came on-line in 2018 so it does take time!

16. Do you plan on adding Tesla battery storage?

LTWP has no current plans to do this. Tesla “big batteries” provide, at least in LTWP’s scenario, opportunity for low-value midnight to dawn production can be stored and sold into the day peak – and that is the widest arbitrage available in the electricity market. However, because LTWP is the cheapest power and almost at the top of the economic dispatch merit order, it is not economical and much more economical for KPLC to dispatch all of LTWP. In order for this, night-time power demand and incentives to shift power usage to night-time are crucial.

17. There are turbines that can produce 5MW, is it possible to replace a 850kW turbine so you are producing more power with one turbine? Why did you opt for the lower capacity WTG?

LTWP originally wanted to use 2MW turbines (V90) but for logistical reasons – the V90 has a hub height of 80M and that proved logistically impossible to transport in a safe, cost-effective and efficient manner. Studies indicated that every roundabout in Mombasa and Nairobi would have had to be “cut through” for an entire year to allow transportation of the V90. Also, the newer technologies have more complex direct-drive gearbox technology that could not easily be serviced in our remote location and would have resulted in extreme periods of downtime. The turbines we use at LTWP, the V52 was, at that time (and for remote locations continues to be) the best option. Going forward, and particularly in areas not located in remote areas (including upcoming wind farms), larger capacity turbines will become more prevalent.

18. How are the communities around Lake Turkana Wind Power project benefiting from the Project?

One of the largest benefits to the communities around the LTWP wind power project has been the upgrading of 208km of the C77 public road from Laisamis to Sarima at a cost of USD 30 million. The road has reduced travel times from Loiyangalani to Laisamis, and allows easier access to Lake Turkana. The drive from Sarima to Laisamis now takes less than 3 hours compared to about 7 hours before the road was upgraded. Moreover, the rehabilitation of the road has also greatly improved access to markets, health centers and education facilities in the wider area.

LTWP, through its Winds of Change Foundation (WoC), has implemented community initiatives aimed at uplifting the socio-economic welfare of communities in Laisamis Constituency (an area of approximately 20,000km²). (See question 3)

The project provided employment for more than 2,500 community members during construction. See question 7 for further information.

19. What is Winds of Change Foundation and how is this linked to LTWP?

More information about WoC can be obtained HERE

20. Which areas are covered by Winds of Change?

Winds of Change operates within the administrative boundaries of Laisamis Constituency. Given the large scale of the constituency, LTWP focuses on:

  • Communities located in the immediate area of the wind farm (i.e. Loiyangalani, M Kulal, South Horr and Sarima); and,
  • Communities located within Laisamis Constituency.

21. What projects has LTWP undertaken with communities in the area?

WoC works in partnership with the county government, local leaders, NGOs, CBOs and government departments in implementing negotiated activities to ensure optimal stakeholder engagement, participation and ownership.

An overview of some of the projects undertaken by WoC can be found HERE.

22. How does LTWP share the Project’s benefits?

LTWP has four main methods through which benefits are shared with the community. These are:

  1. Allocating a minimum of Euro 500,000 (appr KES 60 million) per annum from its revenues to its Winds of Change Foundation (WoC), to be used for community development initiatives in the wider project area. Formally, this commitment will start once the wind farm is operational (forecasted to be 2019). However, by raising funds and partnering with other organizations since June 2015, WoC has already invested approximately Euro 1.5M (approx. KES 180 million) in community development activities in Laisamis Constituency. This means that communities are already benefitting through this mechanism.
  2. Payment of taxes, amounting to millions of shillings, to the national government for development projects at the county government level. The national government is responsible for the collection of tax revenues and distribution to the count
  3. Payment of land lease to Marsabit County Government, which is subsequently responsible for usage of these funds in a manner that enables community development; and,
  4. LTWP is responsible for generating and transferring the major part of revenues from the carbon credits earned by the project to the Government of Kenya (GoK). GoK is then responsible for ensuring that the funds accrued from the carbon credits will be applied to benefit the communities living near the wind farm and along the power transmission line, namely the counties of Marsabit, Samburu, Laikipia, Nyandarua and Nakuru. It is the responsibility of the GoK (not LTWP) to ensure that carbon credit funds are allocated to these counties and used on community development matters.

The benefits described above are in addition to activities such as rehabilitation of 208km of road from Laisamis to Sarima and employment of more than 2,500 people to date (of whom approximately 75% have been from Marsabit County).

23. Are the local communities going to benefit from the electricity that will be generated from this power project?

Yes, communities that are connected to the national grid will benefit from the electricity generated by LTWP. The electricity generated by the wind turbines will go into the national grid. Then the national power distributor, Kenya Power & Lighting Company in conjunction with the Rural Electrification Authority, distributes power under its rural electrification mandate.

Under the Energy Act, power generation and power distribution by the same company is not possible. LTWP only has a license to generate power not for distribution.

Electricity access is a key catalyst for economic development. Increasing access to electricity in Kenya is a goal of the Government. LTWP would like neighbouring communities to be able to access electricity, and is committed to working with the Government and Marsabit County to explore possible avenues to realize this in the future.

24. How many people has LTWP Project employed and what employment opportunities exist going forward?

LTWP project employed more than 2,500 people during the construction phase of the project, of whom about 75% came from Marsabit County.

As of February 2018, the Project employed 334 people, of whom:

  • 255 (76%) are from Marsabit County;
  • 74 (22%) are from other parts of Kenya; and,
  • 5 (1%) are expatriates.

Going forward, LTWP does not expect to employ significantly more people on the project. During operations, the total number of employees is forecasted to fluctuate between 320 - 350 people.

LTWP’s recruitment policy is to fill employment opportunities with as many local people as possible, i.e. people from Laisamis Constituency and/or wider Marsabit County. Where a local suitable candidate is unavailable, LTWP will seek to employ a Kenyan national. Finally, if suitable candidates are not available nationally, LTWP will advertise job openings internationally.

Moreover, LTWP, through its Winds of Change Foundation, prioritizes the hiring of local contractors to implement community development projects (where possible). These local contractors in turn employ locals from Marsabit County.

25. What should I do if I would like to be employed by the Project?

The construction phase of the Project has been completed, thus there are fewer jobs available than during construction. Going forward, the operational jobs that will be available will require specific skills and are advertised HERE on our website and locally by our 15 Community Liaison Officers.

Those interested in applying for a job on the Project can contact us at:

Lake Turkana Wind Power Ltd
P.O Box 2114, 00502
Nairobi

26. How does LTWP recognize human rights issues?

LTWP is committed to ensuring that the development and operation of the Lake Turkana wind farm has minimal negative impact on the communities within the Project’s footprint, and especially on those communities that may be defined as vulnerable, marginalized or indigenous.

LTWP treats all individuals and communities, irrespective of ethnic or social origin, definition or categorization, with respect and without discrimination. LTWP believes that this non-discriminatory approach has fostered an environment where there is less inter-tribal conflict among the communities.

Throughout the Project’s lifecycle LTWP commits to informing the affected communities about the Project, sharing their views, and obtaining broad community support. LTWP will continue to ensure that consultations are conducted in good faith; are culturally appropriate; gender sensitive; voluntary, free of interference and non-manipulative.

All contractors and employees on the wind farm site adhere to Lake Turkana Wind Power’s environmental and social standards, including in relation to human rights and community engagement.

LTWP’s main contractors, under supervision of LTWP, undertake monthly auditing of their subcontractors on labour related aspects that could become human rights issues, such as payroll, accommodation, working conditions and health and safety.

LTWP is audited on a quarterly basis by an external party on behalf of the Project’s Lenders.

LTWP has developed and implemented environmental and social policies and management plans, including : LTWP’s overarching Environmental and Social Policies; Community Health and Safety Management Plan; Labour Management Plan; Stakeholder Engagement Plan; Temporary Accommodation Management Plan; Village Management Plan; Biodiversity and Conservation Management Plan; Cultural Heritage Chance Finds Procedures; Occupational Health and Safety Management Plan; Security Management Plans and Emergency Preparedness and Response Plan, amongst others. These policies and plans will be updated for the operations phase.

27. Where can I get more information about the Project?

LTWP have a dedicated project website, which can be accessed via the following link: https://www.ltwp.co.ke

Videos about the project can be accessed on YouTube through the following link: https://www.youtube.com/channel/UCJxQ6X9uZWGhHG9XanVqZWQ

28. Who should we contact in case of grievances?

The project has a grievance mechanism that deals with grievances submitted by stakeholders, be it local community members or other interested/affected parties.

Any individual or group can contact one of the Project’s 15 Community Liaison Officers (CLO), who will then proceed to register and investigate the complaint. Our CLOs are based in the wider project area and their contacts have been widely distributed.

If you do not have the contact details of one of our CLOs, then you can get in touch with us using our dedicated grievances’ email address:
feedback@ltwp.co.ke

29. How much land is being utilised by Lake Turkana Wind Power Ltd?

The land used for the project is leased by LTWP from Marsabit County for a term of 33 years with an option to extend twice up to 99 years. The entire concession area is 150,000 acres, representing less than 1% of Marsabit County. However, the actual project site required for the wind power project is 40,000 acres. 

Only 0.2% of the site is occupied by physical structures. LTWP’s permanent structures include 365 wind turbines, a substation and workers’ accommodation.

The remaining land, representing 99.8% of the project site, is open to the public and continues to be used by the local nomadic population for settlement, grazing of livestock, and access to water points. Moreover, the C-77 public road passes through the project site, from the southern end to the northwest end.

The project site is not fenced. However, there are two fenced areas, which are (i) the substation, for health and safety purposes; and; (ii) the workers’ accommodation, for security reasons.

30. What happens once 20 years of operation have been completed by the wind farm?

At this time, it is undetermined what will happen in 20 years’ time. There are various options, e.g.:

  • Upgrade of existing wind farm by LTWP (under a new contract with national and county governments, as well as KPLC );
  • Wind farm is fully removed (technical term: fully ‘demobilized’);
  • Sold to a willing buyer; and,
  • Etc.

31. What is hot commissioning?

We've created a timeline to help decipher the hot commissioning process. Please click the link below.

LTWP Hot Commissioning Timeline

CONTACTS

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Lake Turkana Wind Power Ltd
P.O. Box 2114 - 00502,
Karen, Nairobi,
Kenya

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